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You did WHAT to your MONEY?

Understanding your Gen Y kids’ attitude to finances.



Generation Y (Gen Y), also sometimes called Millennials, generally refers to children born from the 80s to early 90s. They are the kids who grew up with the internet, globalisation, mobile phones and social media. You could probably see a Gen Y communicating via text messaging, listening to his iPod, checking email and surfing for information on their next vacation, all at the same time.

Older folks may sometimes view Gen Y as being pampered, privileged and given access to a lot more opportunities than the Baby Boomers (from 1946 – 1964) and Gen X (1965 – 1980), the generation, before them.


In recent years, Gen Y has started entering the work force and the Harvard Business Review projects that by 2014, Gen Y would constitute nearly half of the workforce worldwide1.


Every generation has its uniqueness and Gen Y is no exception. According to a survey on Generation Y’s attitude towards employment, career and salary by global management consulting firm Hay Group, Gen Y has distinct mindsets and priorities, different from their predecessors. “Baby Boomers led a life of striving to make as much money as they can for the comfort of their families while Gen X exercised more balance in their life, making family time as much the priority as work. Gen Yers clearly do not fit the mould set by the Baby Boomers and Gen X as their idea of living diverge from what their seniors typically expect out of life. Their goal is to have a work-life balance, a career without sacrificing their social or personal lives,” says Hay Group country head for protective services Alex Lim2.

In their view of things, personal interests and careers may hold equal weight. For the Gen Y, living an enriching life with pursuits beyond their careers is vital. They have grown up watching their parents work long hours and do not desire the same for themselves. They want more out of life and seek after a job that is not only well paying but meaningful to them2.


Generation Me, Me, Me!

When it comes to finances, Gen Y also brings with them differing values from their parents. For one, they are definitely bombarded with a lot more advertising and sales messages from every angle. Shopping online is a norm. Paying for music via their mobile phones is not unusual. Eating out is part and parcel of life. In fact, 42% of Gen Y is more likely to eat out at an upscale casual- dining restaurant at least once a month, compared to Gen X (33%) and Baby Boomers (24%)3.



Trendy members of the Gen Y are not shying away from buying luxury brands either, even outspending their parents, as the American Express Business Insights Canada reports4.


They are also the group far likelier than other generations to make unplanned purchases just to pamper themselves. They have a tendency to buy now and pay later5.


Alarmingly, more than half – 52 percent – of Gen Y surveyed by KPMG said that they do not actively save their salaries every month. The survey further discovers that “rather than investing for their future, they much preferred to ‘live for the moment’ and they ‘don’t like to commit to anything’6.”


What about your Gen Y kids?

Have you at times shaken your head in disbelief at the way your child buys yet another high tech gadget? Or have you been met with a shrug of nonchalance at rainy days? Getting through to them on managing their finances does take some creativity and most of all, empathy. Here are some of our suggestions which you may find helpful.




We live for the moment.

A survey by KPMG states that “57 percent of the Gen Y population spends half their salaries on social purchases like holidays and technology”6.


They believe in living in the present and in “spending now, saving later”7.


How do you take them on?

Gen Y may be young but they seek meaning and fulfillment in life. Engage them on their life goals (eg. their own business, travel volunteerism) and guide them in realising that denying some of their “I want it now purchases” may help them get the things they really want in life.

You may help clarify that saving is not a duty or something that everyone does but a roadmap towards achieving their goals.


Break the targeted savings amount into smaller achievable chunks which they can tackle on an ongoing basis.


Consider helping them develop a “plan and save habit” such as:

  • Saving RM50 per week when they are in their 20s.
  • Start investing in balanced portfolios when they are in their 30s for higher returns.


When they enter their workforce, suggest to set up a standing instruction to automatically deposit 10% of their income into a savings account. If they are still living at home with you, increase the percentage.



We are social network creatures.

If there is one thing that Gen Y has in abundance, it is access to information. They have grown up with technology at their fingertips and can seek out information in an instant. They are more exposed to trends – gadget trends, fashion trends and even the latest financial trends.


They also rely heavily on social media and peer review to form their opinions. They are well-informed and can learn things quickly when they are interested.


How do you take them on?

Consider presenting financial services to them beyond the traditional format, ie. bank branches and passbooks. Instead, introduce them to online banking such as online@hsbc and mobile banking.


You may also encourage them to look for sites that provide useful financial tips and use available financial planning applications to do a myriad of money management tasks such as setting a monthly budget, tracking their income and expenses, paying bills, etc.

We have financial smarts but we would love some coaching.

Gen Y witnessed some of the financial insecurities that their parent’s faced i.e. the 97-98 Asian Crisis, dot-com bust. They know that savings and investments are necessary, though they may not exactly know how.


How do you take them on?

You can consider coaching them on good financial planning skills. Share popular concepts that they can easily adopt, such as:

  • “Pay Yourself First” concept of setting aside a set percentage into a savings account the very moment they get their paychecks8.
  • “The Latte Factor” concept where trivial things they spend on everyday adds up to an extremely large amount over time. The same amount, if invested, may offer substantial returns9.

We want mobility and time to ourselves.

Generation Y don’t expect to stay in a job, or even a career, for too long as they want mobility in their career lifetime10.


A high salary is less important to them than flexibility, time off to travel and work-life balance. They want meaningful work and care about social causes11.


How do you take them on?

A Gen Y career path may not be the road well travelled and you may be prepared for their twists and turns. It may be reassuring for your child to know that you empower them and support their decisions to pursue careers that they are passionate about.

We may turn to credit to fund our lives.

Gen Y continuously looks for credit and loan schemes that are flexible and suit their needs in order to spend it on their needs and wants12.


How do you take them on?

Help them understand debts such as home loans or study loans that can help them secure things that may increase in value and contribute to their overall net worth.


If they are considering taking up home, car or business loans, you may ask to look into their financial standing and work out the items that are within their reach to ensure they are not overwhelmed by debt later on.

We are optimistic about our future.

One in 3 Gen Y wants to retire early but more than a quarter aren’t saving for it13.


They are aware that they may need to self-fund their retirement in the future but many have yet to start10.


How do you take them on?

Gen Y may be overly optimistic about their future and have not properly considered how much they would need to retire. They also put off saving for retirement as it seems too far down the road.


You may wish to tell your child that starting to save earlier is better. Explain that compound interest can make a big difference to their savings.


Help them to consider the importance of building their retirement funds early, via instruments such as EPF and retirement schemes (eg. Takaful Retirement Plan).


You may also want to share about insurance protection against the unforeseen.

But what if they just won’t listen?

After all that you have said and done, your Gen Y child is finding his/her place in the world and it is his/her decision to make. Your Gen Y child may stumble financially along the way but the good news is, time is still in your child’s hands. With your continued guidance, your child may stand up again and mature into a financially wiser person.


1. Harvard Business Review, “Mentoring Millennials, May 2010″.
2. The Star, “The Gen Y wants a balance between work and play,” 18 February 2012.
3. Technomic, The Generational Consumer Trend Report, 2012, available on
4. The Globe and Mail, “Gen Y’s expensive taste outdoes parents,” 19 June 2012.
5. Time, Moneyland, “Millennials Are Biggest Suckers for Selfish Impulse Buys”, 27 April 2012; USA Today, “Generation Y’s steep financial hurdles: Huge debt, no savings”, 23 April 2010.
6. KPMG Survey, “Frontiers in Finance,” December 2008.
7., “Problems loom with ‘save later’ attitude”, 30 October 2008.
8. David Bach, “The Automatic Millionaire”, 2003.
9. David Bach, “Start Late, Finish Rich”, 2007.
10. PricewaterhouseCoopers “Malaysia’s Gen Y unplugged”, 2009.
11. The Guardian, UK, “They don‚’t live for work … they work to live,” 25 May 2008.
12. Mission Australia, “National Survey of Young Australians 2011″.
13, “Gen Y wants to retire early, but not saving for it”, 1 August 2012.

October 2012